Baidu faces tighter competition in the search market as it competes for advertising customers with upstarts like Qihoo 360.

But Baidu’s selling, general and administrative costs increased 77 percent and its R&D jumped 83 percent. The company’s profit margins also narrowed after Baidu announced plans to buy a stake in online video site iQiyi last November. Baidu is gearing up to compete with streaming video giant Youku-Tudou, with reports emerging recently that it purchased PPStream.

In its earnings release, Baidu’s CFO Jennifer Li said “we remain committed to investing aggressively, particularly in marketing and R&D. By deploying resources in the most strategically important areas of our business, we’re confident we can build exceptional long-term value for shareholders.”